Tourism Holdings $20m profit down almost 30 per cent from Covid-19

Friday, 18 September 2020

Tourism Holdings Ltd received $4m in grants and loans from the Government’s strategic assets fund to keep its Discover Waitomo attraction open to the public.

The shock of Covid-19 contributed to Tourism Holdings Ltd posting a net annual profit of $20 million, down by almost 30 per cent.

That was slightly better than the forecast result of $17.5m to $19.5m released in June guidance to the NZX, but the drop means no final dividend for shareholders.

The company’s annual report described it as a year in two parts with revenue growing across its operations globally before the pandemic struck.

The net profit of $20m after tax excludes a number of one-off items, including a partial exit from RV rental platform Togo in March which resulted in a one-off gain of $9.3m, a tax benefit of $1.1m in the USA and the write-off of $3.1 million of goodwill attributed to its Kiwi Experience backpacker bus operation.

A disastrous fire at THL’s Auckland depot damaged 150 vehicles, 40 of them seriously. Chief executive Grant Webster said total cost of the blaze would run into millions if not tens of millions when damage to the building they rented was taken into account. (File photo)

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Statutory net profit after tax of $27.4m was down 8 per on the previous year to June.

A major sell off of campervan rental vehicles helped reduce net debt, which was $128m at the end of June, but had dropped to $75m by the end of August.

Vehicle sales in the US contributed to 68 per cent revenue growth over the last four months of the financial year, and THL recently announced it would sell off about 1500 rental campervans in New Zealand.

It has been a torrid few months for the company which lost two top executives in restructuring after the border closed, and on top of the loss of income from overseas tourists, its Auckland depot was the scene of a major fire earlier this month.

THL chair Rob Campbell said the result was admirable given the shocks of Covid-19 since March, and although there was still considerable uncertainty about the coming 12 months, the company was constantly assessing all potential scenarios and responding to developments as they occurred.

Chief executive Grant Webster said Covid-19 was the single biggest challenge the company had faced in its history.

But with good control of the balance sheet and strong ongoing demand for rental campervan sales, it was prepared to cope with a totally domestic market, and well positioned to recover quickly when international tourism returned.

He said Government support schemes had helped, including a $2m grant and a similar amount in a loan made available to Discover Waitomo, which kept the famous glowworm cave tours running and saved jobs.

“We were facing significant losses that pushed ed us to the point of ‘should we be closing up or should we not?’, so the Government funding did make a difference,” Webster said.